THE VALUE OF LAND
PROPERTY ACQUISITION 2:
THE VALUE OF A PIECE OF LAND
Property acquisition through a purchase agreement entails the payment of a consideration sum to the owner (where the land has a title) or to the occupier( for untitled lands). This is most common method of land acquisition in urban and Semi urban areas of Cameroon.
In acquiring a land, it is wise to consult a real estate agent or broker to get important information about the availability of land for the intended purpose: land can be bought for one or more of the following main purposes: Agriculture, private residence, localisation of industries and business centers to name but a few.
Investors in lands have their sight set on key aspects/characteristics of the kind of land they want. Whatever the need may be, a piece of land is mostly evaluated based on the following:
Lands in Cameroon are mostly measured in meter square (m2). Lands from meters square to hectares can still be acquired in most regions of Cameroon. Lands are commonly divided into parcels of 20m by 20m (400m2), 20m by 25m (500m2), 20m by 30m (600m2),25m by 30m (750m2), 30m by 30m (900m2) and 20m by 50m (1000m2). A normal plot/parcel of land for individual sales in some cities may be different but the standard is 500m2 for small parcels and 600m2 for large parcels. However, most plot sizes allocated by the Government agencies to individuals often have minimum LOT sizes of 800m2 and 1000m2.
Land size is a very important factor in valuation of a property.
Land located in urban areas often cost two to three times their value in rural areas. This is mostly because of their exposure (accessibility, position, development, etc). lands in rural areas are often abandoned or limited to agriculture. Companies and business men rather prefer urban areas due to security, strategic positioning of companies, access to the market/customers, return on investment and stability. These factors most often can raise the cost of a land up to 100 times the value of a similar size in rural areas.
NATURE OF THE LAND (flat/sloppy, Dry/Swampy, Shape)
Another factor that can influence the value of a land is its nature.
Flat/Sloppy: Most clients are often than not interested in lands that are flat in nature. More so, most lands that are inclined/sloppy are not often included when issuing land certificates. For this reason, small investors shy away from acquiring such land(sloppy) as they may not have land titles which can in return prevent them from acquiring loans through mortgage. Large investors or those who have a specific purpose of such lands may sometimes pay above average for such lands.
Dry/Marshy: Most buyers will value dry lands over swamps. This is because the cost of developing such sites could be exorbitant. Comparing the cost of building on a dry land and a swampy area could result to a cost proportion of one is to 3. The cost of reclamation at times could cost as much as the acquisition cost.
Most farmers who wish to acquire large areas of farmland for Vegetables, corn, fish ponds and others may cherish such swamps.
Shape of the Land: Land surfaces can vary in shapes such as circles, triangles, rectangles, squares and a combination of the above. The shape of a land may influence a buyer as he pictures the kind of project to be carried on it. The position and beauty of a structure can be distorted by the shape of a land.
DEVELOPMENTS ON THE LAND (house, crops, titles, e.t.c)
Developments on a piece of land affects its value. Generally, anything such as stones, timber, local trees, crops, buildings, titles, etc found on a property is assumed to give it additional value. This situation however may be insufficient or possess no value to a buyer who thinks otherwise. Taking a House for instance: A ten million House on a piece of land may be useless for a plantation farmer. Most buyers want to build to their taste and with materials that they like. As such, the building may send them away. Some may consider the cost of cutting down trees and making the area habitable to be too costly. The cost of transferring a title at times may cost up to a third (1/3) the value of the property thereby scaring buyers.
We often advice our clients at Legacy Housing And Real Estate to have a complete picture of their project(s) before considering the points listed above. This is because what may be considered a disadvantage for a client due to finances and present condition may stand as a huge advantage to another either with a higher financial position or future developments.